:max_bytes(150000):strip_icc()/GettyImages-2166092743-efda35565cf94e0eb6ca5630cafab28b.jpg "HelloFresh shares rise rapidly as ready meals boost profits")
Key findings
- HelloFresh beat earnings forecasts as sales of the company’s ready-to-eat (RTE) meals soared.
- The Germany-based meal kit provider said RTE sales increased 45.2% year-on-year, while meal kit sales fell 9.9%.
- HelloFresh noted that while the overall number of customers had declined, existing customers “continued to show robust behavior.”
HelloFresh reported better-than-expected second-quarter profit as demand for the meal kit provider’s ready-to-eat (RTE) offerings boomed.
The Germany-based company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 146.4 million euros ($160.4 million), beating expectations. Revenue rose 1.7% year-on-year to 1.95 billion euros ($2.14 billion), just below forecasts.
On a constant currency basis, HelloFresh’s average order value increased by 4.7% to EUR 66.6 million and sales of RTE products increased by 45.2% to EUR 513.7 million. However, meal kit sales fell by 9.9% to EUR 1.4 billion.
RTE business on profitable growth path
Co-founder and CEO Dominik Richter said the RTE business “continues its structural and profitable growth trajectory. Our investments in our product, our production capacity and our brand are paying off.”
The company noted that the total number of customers has decreased since it shifted its focus to high-value customers, but added that existing customers “continue to show robust behavior,” resulting in higher order rates and higher customer retention compared to last year. HelloFresh also said it had initiated measures to “right-size its production capabilities” for meal kits in North America, which resulted in a one-off non-cash impairment charge of €32 million.
HelloFresh shares closed in German trading up 15.9 percent at 6.26 euros. Nevertheless, they will fall by around 55 percent in 2024.
